Hot spots emerge in southeast Michigan housing market

Patrina Spisz, 56, of South Lyon and her husband, Mark Spisz, 54, will soon be moving into their newly built home in South Lyon. They sold their existing home, also in South Lyon, in one day for the full asking price. They were surprised by how quickly they got an offer.(Photo: Ryan Garza/Detroit Free Press)Buy Photo

Story Highlights

Since the rock bottom of the housing crash seven years ago, some corners of southeast Michigan are seeing red-hot rebounds in prices and demand — and the welcome reappearance of bulldozers and construction crews as developers try to cash in.

There are real estate hot spots for selling, buying or building houses, such as South Lyon, Holly and Inkster, where values fast approach prerecession peaks since jumping 40% to 50% or more since 2009.

Previously pricey neighborhoods are also regaining earlier form, including funky Ferndale and wealthier, family-oriented Grosse Pointe Farms, according to an extensive review of housing sales data by the Free Press.

"We are back to multiple offers on resale homes," said Realtor Jan Gurski of Re/Max Home Sale Services, which just this month opened a new office in Lyon Township to be where the action is. "They are getting over asking price, and buyers paying above appraised value."

At the same time, some Wayne County communities are still feeling the icy grip of a cold market, such as Romulus and Redford Township, where recent sale prices have been lower than recessionary levels. And other communities, such as Lincoln Park, Warren and Hazel Park, are more or less where they were six years ago.

The Free Press dived into the numbers and analyzed nearly six years of town-by-town property transactions from four counties to reveal the townships, hamlets and communities with the strongest and most dramatic rebounds.

Buy Photo

Southeast Michigan's largest percent increases in home sale values by county from 2009 to 2014.(Photo: Kristi Tanner and Martha Thierry/Detroit Free Press)

In Oakland County's South Lyon, new construction is leading the rebound. The median sale price in the area, including Lyon Township, was $180,000 in 2009. It reached $258,000 this year through September, a 43% increase, and seems poised to climb even higher as dozens of additional $300,000-plus houses will soon hit the market.

"You drive in any direction east or west along 10 Mile from Wixom Road to Rushton (Road), and you're probably going to see development on each side of the road," said Sunny Grewal, general manager for Singh Homes, developer of the 100-lot Charleston Park. "That is development we haven't seen in quite awhile."

One unlikely hot spot few would have predicted is the village-like city of Chelsea in Washtenaw County, with median home sale prices surging to $222,450 in September from $150,000 in 2009 — a 48% increase

The Chelsea rebound, driven by the resale market, seems all the more dramatic, considering Pfizer's 2007-08 closure of its Ann Arbor research and development center, a loss of more than 2,000 jobs.

"When Pfizer left, there were over 800 homes that were thrown onto the market all at once," said Realtor Rick Taylor of the Charles Reinhart Co., an expert on the Chelsea market. "That killed us. So we were thrown into recession even before the national recession."

Taylor recalled how houses that were worth $400,000 fell to about $280,000 as well-paid Pfizer employees all tried to sell at once. Houses that had been $280,000 dropped to about $200,000.

Chelsea eventually absorbed the inventory, and Taylor said he's witnessing the town's strongest sales period in years. He said Chelsea is benefiting from the robust economy and housing market in Ann Arbor, about a 25-minute drive. Chelsea's early troubles maybe meant an earlier rebound than other communities, Taylor said.

"If anything, I'm almost worried that we're recovering too well, because there's a point where you don't want it to bubble again," he said.

Gary Basso, 69, and his wife fetched $200,000 for their unit in Bridgetown Condominiums, the highest sale price in that area in recent memory, according to Taylor, their Realtor on the sale.

Basso said he had wanted to sell for a few years but opted to wait in hopes of getting a better price as the market improved. Even though he wasn't completely sure he would get full asking price on the condo, such an offer did arrive in just the first week.

"We put it a little higher than we thought, and it sold for a full-price offer," said Basso, who's staying in Chelsea but downsizing.

'Inventory is tight'

Chelsea is a short drive from another hot spot in Washtenaw County — the village of Dexter. Median sale prices have risen 24% since 2009 to $241,250, driven by both the warming resale market and new home construction between Dexter and Chelsea.

Bob Ziegler, a broker with Century 21 Brookshire in Ann Arbor, said a slim inventory of homes in and around Dexter has been pushing up prices. It's a similar story across the region.

"That's pretty much anywhere you go," Ziegler said. "There is very little supply right now in these markets, and it's driving these prices up."

The latest figures on the Standard & Poor's/Case-Shiller Home Price Index show that home sale prices in July across metro Detroit were back to early 2008 levels but still about 22% off their prerecession peak. That index included prices for Wayne, Oakland, Macomb, Livingston, St. Clair and Lapeer counties.

Within Wayne County, the median sales price in Grosse Pointe Park and Grosse Pointe Farms rose over six years to about $280,000 from just under $190,000.

Although properties between $500,000 and $1 million may still take time to sell, houses in those communities priced between $200,000 and $250,000 are moving incredibly fast, said Realtor Tom Ball of Real Estate One. Grosse Pointe Park is seeing particular interest from younger families.

"Inventory is tight. There is not a lot. So the right house at the right price will get snapped up fairly quickly," Ball said.

New construction

In South Lyon, much of the new construction is happening in new subdivisions along 10 Mile Road. Several of those developments broke ground during the housing boom only to stall in the crash. The sites were later snapped up at discounts by other builders, who are now filling the vacant lots.

Local real estate experts cite a variety of reasons for the South Lyon home-building boom: quality local schools, bountiful open space and parks, and the proximity of I-96 and U.S.-23, which makes it easy for breadwinners to commute. Yet perhaps the defining factor is its affordability for the middle class and families starting out.

"Frankly, many of the areas that are older and established are sold out, and that has an effect of pushing up sale prices," said Brandon Jones, Michigan division president for the PulteGroup, which has three ongoing developments in the area: Pinehurst, Tanglewood and Orchards of Lyon.

"So there's an affordability component to Lyon Township that makes it really attractive. You can get a really nice house in a really nice neighborhood at a really reasonable price."

The latest group of buyers includes Mark and Patrina Spisz, who will soon move into their newly built ranch home in the Saddle Creek subdivision by Lombardo Homes in South Lyon, where prices start at $312,900. With help from their agent, Jan Gurski of Re/Max, they sold their existing two-story house in South Lyon this summer for nearly their full $349,000 asking price.

The couple heard that the South Lyon market was heating up, yet were still surprised by how quickly they got an offer.